On average, 5% of total accounts receivable has been uncollectible in the past. At the end of the year, the balance of accounts receivable is $100,000 and the allowance for doubtful accounts has an unadjusted credit balance of $500. Credit sales during the year were $150,000. Using the aging of accounts receivable method, the estimated bad debt expense would be:
A) $4,500.
B) $5,000.
C) $5,500.
D) $7,500.

Question

Quizplus · Accepted Answer

The aging of accounts receivable method is not provided in the question, so the estimated bad debt expense cannot be calculated.

On Average, 5% of Total Accounts Receivable Has Been Uncollectible